Software+Services Madness

Microsoft has been desperately seeking ways to differentiate itself from the
rest of the Software as a Service (SaaS) pack. Even though Microsoft is charging
full steam ahead into the software services realm, the Microsofties don't want
to be seen as Johnny-come-lately to a world already dominated by Google, eBay
and Salesforce.com.

That's where Microsoft's "Software+Services" (S+S) strategy comes
into play. S+S, according to the Softies, is a superset of SaaS. It's SaaS done
right.

There's only one problem: No one at Microsoft or anyone who watches it seems
to be able to succinctly explain S+S. Microsoft tried to get the message out
to market researchers and analysts at the end of February, but no one with whom
I spoke seemed to understand the subtleties of Redmond's message.

I'm going to give it a whirl. After chatting with Microsoft Director of Platform
Strategy Tim O'Brien, I feel ready to try to decipher S+S for the masses.

Microsoft's competitors -- like Adobe with Apollo and Salesforce.com with its
Salesforce.com Offline Edition client app -- are gradually acknowledging that
an all-services approach leaves many business customers cold, says O'Brien.
They want offline capabilities, even if they're relying on SaaS applications.

For business customers, "network dependency is a nonstarter when it comes
to line-of-business applications," says O'Brien. Consequently, everyone's
trying to figure out how best to move to the middle. O'Brien says Microsoft's
stance is "anyone can get reach."

"The real battle is on the client," O'Brien posits, and desktop software
has always been Microsoft's strong suit. However, Microsoft is no slouch on
the Internet-based services side either, O'Brien says. The company doesn't get
enough credit for its Internet savvy, which it has demonstrated by running highly
scalable Hotmail, Xbox Live and other consumer-side services.

O'Brien itemizes current and future Microsoft services into three buckets:
Foundation services, like Microsoft's long-rumored LiveDrive cloud-based storage;
Attached services, such as disaster recovery, anti-spam and Windows Defender;
and Finished services, like Windows Live and Office Live.

Services companies like Google and Salesforce.com often underestimate the types
of back-end infrastructure that are needed to properly field enterprise-ready
software, he explains.

What you need in order to do it all, O'Brien says, is "a platform."
That doesn't mean .NET or some kind of development platform, which is what Microsoft
usually means when it uses the "P" word. In the S+S case, "a
platform" is synonymous with vision (I think). These are the elements of
Microsoft's S+S platform, according to O'Brien:

• Experience: As in the interface. Depending on the access point
(whether a PC, browser or mobile device), you get a different look/ feel/interaction.

• Federation: How do users validate/ authenticate/manage when
one vendor doesn't own all the pieces? The pie-in-the-sky answer is the identity
metasystem. S+S will provide some elements of this system (via Microsoft CardSpace,
Active Directory and Live ID).

• Composition: All of the bits aren't located in one place in
the S+S world. Composite applications and mashups are the new "it"
apps.

• Monetization: Online ads aren't the only way to make software
services pay for themselves. Subscriptions, pay as you go, traditional shrink-wrap
plus maintenance and other to-be-determined mechanisms will also fuel S+S.

As usual, Microsoft believes it can be all things to all people. The S+S arena
is just another example of that belief.

What do you believe? Is Microsoft well-positioned to take on Google, Salesforce.com
and other services competitors? Or is Microsoft's desktop legacy holding the
company back from being able to move ahead in the brave new SaaS/S+S world?

About the Author

Mary Jo Foley is editor of the ZDNet "All About Microsoft" blog and has been covering Microsoft for about two decades. She's the author of "Microsoft 2.0" (John Wiley & Sons, 2008), which examines what's next for Microsoft in the post-Gates era.